Estate, Powers and Trusts, § 11-1.8: Power of Fiduciary or Custodian for Fiduciary to Deposit United States Government and Agency Securities With a Federal Reserve Bank

A fiduciary is a person who holds a legal relationship of trust with respect to another person. With regard to estate planning, examples of fiduciaries include an executor of a decedent’s estate and the trustee of a living or testamentary trust. However, a fiduciary may also be a bank or other financial institution that holds assets for the benefit of someone else. Or a financial institution may be the custodian of assets that a fiduciary holds for the benefit of someone else. Under New York estate law there are rules and regulations that such financial institutions must follow. For example, New York Estate, Powers and Trusts, § 11-1.8, financial institutions acting as fiduciaries or custodians must keep accurate records of ownership of securities. As you contemplate drafting your will and creating other estate planning documents, it is important to understand the role of an executor, trustee, and other fiduciaries and custodians who may play a part in managing your estate once your pass away. It is important to contact an experienced New York Estate Administration Lawyer who will educate you on the duties and responsibilities of fiduciaries and who will make sure that your estate planning documents reflect your wishes and are consistent with New York probate law.

1. Fiduciaries’ responsibilities: Estates, Powers and Trusts, § 11-1.1
2. Tax elections by personal representatives: Estates, Powers and Trusts, § 11-1.2
3. Validity of execution of power to sell, mortgage or lease real property by less than all qualifying executors: Estates, Powers and Trusts, § 11-1.4
4. Payment of testamentary dispositions or distributive shares: Estates, Powers and Trusts, § 11-1.5
5. Property held as a fiduciary to be kept separate: Estates, Powers and Trusts, § 11-1.6
6. Property held as a fiduciary to be kept separate: Estates, Powers and Trusts, § 11-1.7

When an executor, trustee or other fiduciary manages the assets of an estate or trust, it may be necessary to deposit assets with a bank or other financial institution. The financial institution will then service as a fiduciary or a custodian with respect to the funds deposited. In such a case institution with New York estate law which requires that such institutions:

• Accurately report the ownership of such deposits
• Comply with regulations related to the making and maintenance of deposits
• Comply with demands from appropriate fiduciaries for an accounting

1. Notwithstanding any other provision of law, any bank or trust company, when acting as fiduciary and any bank, trust company or private banker, when holding securities as custodian for a fiduciary pursuant to § 11-1.1(b)(9), is authorized to deposit, or arrange through a subcustodian or otherwise for the deposit, with the federal reserve bank in its district of any securities the principal and interest of which the United States or any department, agency or instrumentality thereof has agreed to pay, or has guaranteed payment, to be credited to one or more accounts on the books of said federal reserve bank in the name of such bank, trust company or private banker, to be designated fiduciary or safekeeping accounts, to which account other similar securities may be credited.  A bank, trust company or private banker so depositing securities with a federal reserve bank shall be subject to such rules and regulations with respect to the making and maintenance of such deposit as, in the case of state chartered institutions, the state superintendent of financial services, and, in the case of national banking associations, the comptroller of the currency, may from time to time issue.  The records of such bank, trust company or private banker shall at all times show the ownership of the securities held in such account.  Ownership of, and other interests in, the securities credited to such account may be transferred by entries on the books of said federal reserve bank without physical delivery of any securities.  A bank, trust company or private banker acting as custodian for a fiduciary shall, on demand by the fiduciary, certify in writing to the fiduciary the securities so deposited by such bank, trust company or private banker with such federal reserve bank for the account of such fiduciary.  A fiduciary shall, on demand by any party to its accounting or on demand by the attorney for such party, certify in writing to such party the securities deposited by such fiduciary with such federal reserve bank for its account as such fiduciary.
2. This § shall apply to all fiduciaries, and custodians for fiduciaries, acting on the effective date of this § or who thereafter may act regardless of the date of the instrument or court order by which they are appointed.

Making a will, trust and other estate planning documents and appointing fiduciaries will affect how your estate is managed once you pass away. It will also impact the financial future of your family members. It is important to make sure that it is done correctly. The staff at Stephen Bilkis and Associates has years of experience working closely with New York clients to draft wills and other estate planning documents such as trusts, powers of attorney and living wills. To learn more about estate planning, contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your estate plan.